The development of novel therapeutic approaches to repair fractures and other bony defects remains a critical necessity to treat complex and non-healing orthopedic injuries. This proposal focuses on use of human embryonic stem cells (hESCs) and induced-Pluripotent Stem Cells (iPSCs) offer specific advantages for development of new therapies to improve bone formation and fracture healing. This proposal is designed to test the hypothesis that cells derived from hESCs and iPSCs serve as mesoderm progenitor cells with osteogenic potential and have the ability to repair non-union orthopedic fractures. These studies will pursue two complementary approaches. First, we will utilize an expression-reporter hESC line that we have generated that has the promoter RUNX2 (an early osteoblast developmental gene) to drive expression of the fluorescent protein, mCitrine (mCit). Identification and isolation of RUNX2/mCit+ these cells will allow us to define key signaling pathways that mediate the development of osteogenic cells. Specifically, osteoinductive including dexamethasone, ascorbic acid, rhFGF-9, rhBMP-2, Wnt3a and rapamycin will be used to stimulate RUNX2-mCit expression. The identification of mCit+ cells will us to identify similar populations of osteogeneic cells derived from iPSCs, eventually paving the way for the utilization of patient-specific (autologous) iPSC- based therapies. The second aim will utilize hESC and iPSC-derived mesenchymal stem/stromal cells (MSCs) and osteogenic cells to define the optimal phenotypic cell population and conditions for osteogenic growth and repair. We hypothesize that hESC- and iPSC-derived cells will have increased osteogenic potential compared to MSCs isolated from human bone marrow (BM-MSCs). Specifically, we will advance our preliminary studies that demonstrate that hESC/iPSC-derived MSC have more vascular inductive potential than BM-MSCs leading enhanced healing in vivo. Here, two in vivo osteogenic models will be evaluated: subcutaneous implantation of cells within scaffolds and a rodent fracture repair model with osteogenic cells locally implanted within scaffolds at the non-union fracture site. Together, this project combines expertise of research groups with proficiency in stem cell biology, orthopedic surgery, biomechanical engineering, bone biology, histology and osteogenic developmental biology. Successful completion of these studies will advance the use of human pluripotent stem cells to better define cellular and genetic mechanisms that mediate human bone development and translate these studies to stem cell-based repair of non-union orthopedic fractures.